1232.HK WACC - Weighted Average Cost of Capital

The WACC of Golden Wheel Tiandi Holdings Company Ltd (1232.HK) is 5.3%.

The Cost of Equity of Golden Wheel Tiandi Holdings Company Ltd (1232.HK) is 21.15%.

The Cost of Debt of Golden Wheel Tiandi Holdings Company Ltd (1232.HK) is 5.50%.

	Range	Selected
Cost of equity	17.00% - 25.30%	21.15%
Tax rate	6.80% - 8.50%	7.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.0% - 6.7%	5.3%

WACC

1232.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.36	3.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.00%	25.30%

Tax rate	6.80%	8.50%
Debt/Equity ratio	55.58	55.58
Cost of debt	4.00%	7.00%

After-tax WACC	4.0%	6.7%


Selected WACC	5.3%

1232.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 1232.HK:

cost_of_equity (21.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.36) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.